The Piracy Paradox.(The Talk of the Town)(imitation clothes)

In 1932, a group of American fashion manufacturers found themselves beset by a proliferation of cheap knockoffs. Designs, then as now, were not protected by patents or copyrights, so the manufacturers decided to take direct action to stop the copying. They set up the Fashion Originators Guild of America to monitor retailers and keep track of original designs; if you look at vintage dresses from the thirties, you can find labels reading "A registered original design with Fashion Originators Guild." Retailers selling knockoffs were "red-carded," and guild members wouldn't sell their merchandise to red-carded stores. This was unpopular with the retailers, but it seems to have put a damper on the copying. The only hitch in the plan was that it was illegal: in 1941, the Supreme Court ruled that the manufacturers' arrangement violated antitrust law, and the knockoff artists stayed in business.

In the decades since, copying has remained ubiquitous in the fashion industry. Fashion-forward but low-priced retailers like H & M and Zara have flourished, thanks to their ability to take designs from Milan to the mass market. Private-label designers for major department stores trumpet the fidelity of their imitations. And almost as soon as hot new designs appear on the runway, photographs and drawings of them are on their way to Chinese factories that can produce reasonable facsimiles at a fraction of the cost. Designers are as annoyed by this as their prewar forebears were, and so Congress now finds itself considering a bill, pushed by the Council of Fashion Designers of America, that would give original designs a legal protection similar to copyright.

Designers' frustration at seeing their ideas mimicked is understandable. But this is a classic case where the cure may be worse than the disease. There's little evidence that knockoffs are damaging the business. Fashion sales have remained more than healthy--estimates value the global luxury-fashion sector at a hundred and thirty billion dollars-- and the high-end firms that so often see their designs copied have become stronger. More striking, a recent paper by the law professors Kal Raustiala and Christopher Sprigman suggests that weak intellectual-property rules, far from hurting the fashion industry, have instead been integral to its success. The professors call this effect "the piracy paradox."

The paradox stems from the basic dilemma that underpins the economics of fashion: for the industry to keep growing, customers must like this year's designs, but they must also become dissatisfied with them, so that they'll buy next year's. Many other consumer businesses face a similar problem, but fashion--unlike, say, the technology industry--can't rely on improvements in power and performance to make old products obsolete. Raustiala and Sprigman argue persuasively that, in fashion, it's copying that serves this function, bringing about what they call ...